Fixed vs. variable mortgage rates are always a big decision, but there’s more uncertainty than usual heading into the fall of 2026. Between inflation, layoffs, tariffs and what’s happening in the U.S., there are pressures pulling Canadian rates in different directions.
My view right now is that rates are more likely to trend higher over the next year or two than significantly lower.
Watch my video or read on for more details:
Will Canadian Mortgage Rates Move Higher?
Canada doesn’t operate in isolation. What happens in the U.S. economy and financial markets can have a significant impact on borrowing costs here.
Inflation is one concern. Tariffs can increase the cost of goods, while significant investment and government spending can put additional pressure on prices and borrowing costs. If those pressures persist, Canadian rates could feel some of the effects.
Fixed And Variable Mortgage Rates Move Differently
Understanding fixed vs. variable mortgage rates starts with knowing that they aren’t driven by exactly the same thing.
Variable mortgage rates are closely connected to the Bank of Canada’s policy rate. If the Bank of Canada raises or lowers its rate, variable mortgage rates follow.
Fixed mortgage rates are more closely connected to bond yields. Canadian bond markets are influenced by what happens in the U.S., which is why American inflation and interest-rate expectations can affect the fixed mortgage rates Canadians are offered.
Why I Would Lean Toward A Fixed Rate Today
If I were buying a home today, I would probably choose a fixed mortgage.
Fixed rates are still reasonably low, and locking in gives you cost certainty. You know what your mortgage payment will be and don’t have to worry as much about what happens with rates over the next few years.
That can be particularly valuable if your budget doesn’t have much room for a higher payment.
When A Variable Rate Could Still Make Sense
A variable mortgage isn’t automatically a bad choice. If you have a relatively small mortgage, a high income, or enough room in your budget that changing payments won’t cause problems, you may be more comfortable taking the risk.
That’s why there’s no universal answer to the fixed vs. variable mortgage rates question. The right choice depends on your finances and how much uncertainty you’re comfortable carrying.
Choosing A Mortgage In An Uncertain Market
Nobody knows exactly where mortgage rates will be a year from now. That includes economists, the Bank of Canada, and mortgage brokers.
Instead of trying to perfectly predict the market, I’d focus on choosing a mortgage that you’ll still be comfortable with if the prediction turns out to be wrong.
Whether you are preparing to buy your first home or your fifth, if you’re looking to get pre-approved for a mortgage in Edmonton, fill out my online application. I’m here to help you every step of the way.
About Jason Scott, Edmonton Mortgage Broker
Looking for a personalized mortgage solution? As an Edmonton Mortgage Associate, I’m trusted partner who will help you get the right mortgage for your home or investment property. I’m Jason Scott, and I’ll be your Mortgage Broker in Edmonton.
